Work

Valuation and Long-Term Growth Expectations

Year: 2025

Type: article

Abstract: Long-term growth expectations are central to investment analysis and corporate valuation. Despite a dominant effect on firm value, the academic literature and practitioner conventions provide little guidance on determining this long-term growth rate. This article takes a step in addressing this gap: we estimate the relationship between long-term growth and an extensive selection of firm, industry, and market characteristics. Market prices do not seem to fully capture long-term growth information. Cross sectional tests yield substantial positive abnormal returns for firms with high expected long-term growth.

Source: Journal of Financial and Quantitative Analysis

DOI: 10.1017/s0022109024000425

Authors: Angel Tengulov, Josef Zechner, Jeffrey Zwiebel

Institutions: University of Kansas, Vienna University of Economics and Business, Stanford University

Language: English

Topic: Financial Reporting and Valuation Research

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,550

OpenAlex ID: W4409236774